Reorganizing U.S. Agriculture: THE RISE OF INDUSTRIAL AGRICULTURE AND DIRECT MARKETING

Among alternative agriculture's basic tenets is the notion that the long-term health of our food and fiber system depends upon maintaining sufficient diversity in production, processing, and marketing. Such diversity ensures open access, competition, and innovation. The rationale is similar to that for maintaining adequate diversity in natural biological communities - reductions in species diversity (and competition) hamper our ability to adapt to social, physical, and biological shocks through time. This report examines the implications of two emerging and quite different food streams in U.S. agriculture: industrial and direct marketing. Clearly, the future trajectory of these two food streams will have enormously important implications for agricultural diversity in all of its forms and manifestations. This report represents the second installment in our ongoing investigation of structural change in U.S. agriculture. The first report in this series, The Industrial Reorganization of Agriculture (June, 1996), provided a general overview of the basic structural changes accompanying the industrialization process. Both reports detail ongoing changes in agriculture and provide information and insight about what these changes may mean for agricultural sustainability. The industrialized food stream is characterized by highly concentrated production and processing sectors and coordination between stages of production via vertical coordination or contractual arrangements. One consequence of the vertical coordination and contracting is that the control over production operations by farmers and ranchers is being reduced. Operators who sign contracts that ensure access to large industrialized markets are usually given less latitude in selecting inputs and production practices. During the last decade. the Wallace Institute has received numerous inquiries about the effects of a more industrialized agriculture on farmers and ranchers. consumers. environmental resources and the welfare of rural communities. Direct marketing of agricultural products is simultaneously rising at exponential rates around the country. For example. farmers markets have increased from less than 100 in 1960 to over 2400 in 1996. and by almost 40 percent from 1994 to 1996. Although these direct markets deliver a small proportion of total food supplies. they represent an emergent trend with important implications for maintaining a diverse set of farms. ranches and processing operations. The direct marketing stream is characterized by direct contact between producer and consumer. smaller-scale production operations. and a highly decentralized structure - opposite traits to the industrialized process. Direct marketing is based on the concept that farmers and ranchers control the products of their operations from cultivation and weaning to final sale. The vitality and growth of the industrial and direct marketing food streams suggest that both will be with us for some time. Therefore it is important to understand how these food streams are constructed. and how they are perceived by producers. consumers and public policy makers. Also. it is critical to conduct research to inform public policy needed to foster development paths that incorporate all social benefits and costs. These and other important issues and questions are addressed in this report.


Issue Date:
1997
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/134115
Total Pages:
53
Series Statement:
Policy Studies Report No. 7




 Record created 2017-04-01, last modified 2017-09-21

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